An exploratory research was conducted in an ex-subvented hospital, Caritas Medical Centre, to examine whether the experience of quality assurance circle would facilitate the development of transformational leadership in hospital. Bass & Avolio's Multi-factor Leadership Questionnaire(1990) Rater Form was used to measure the transformational leadership scores of 10 leaders of quality assurance circles and 4 leaders of line function teams who had no experience in quality assurance circle as control group. The findings indicated that the transformational leadership scores of circle leaders was significantly higher than their counterparts in control group and suggested that the experience of quality assurance circle was be contributory to the development of transformational leadership. Implications were drawn to use quality assurance circles as training vehicle for transformational leaders in hospital. The importance of quality assurance circle to hospital could not only be viewed from outcome orientation but also from process orientation.